Maintenance firm RTG gets portion of invoice

The City of Ottawa will be paying the Rideau Transit Group more than $17.4 million for LRT maintenance over much of the past year — a figure that could still rise and currently equals about 40 per cent of what the consortium invoiced for, with deductions applied for poor performance.

Until now, the city had paid RTG only a little over $5.1 million for maintenance in September and one day in August last year. Subsequent maintenance payments were held back because of unreliable service along the Confederation Line, with the city facing questions about what portion, if any, would ultimately be paid out.

Answers came Wednesday in the form of a memo to members of council and the transit commission from transportation general manager John Manconi.

The memo explained that following a review of RTG invoices for maintenance between October 2019 and January 2020, and discussions with RTG, its maintenance arm Rideau Transit Maintenance, and external legal counsel, a $5.47-million payment will be made to RTG after applying $12.21 million in deductions to the $17.68 million that was supposed to be paid out for that period.

The $5.47-million sum may increase, the memo notes, because the city and RTG have yet to come to an agreement on a number of issues related to the measures used to assess RTG’s performance, and determine deductions. There are some grey areas that still need to be hashed out.

The city is also preparing to pay $11.97 million for maintenance in May, June and July, after a modest $683,000 in performance deductions for that period.

“As a result of the COVID-19 pandemic, during the period from April to June, there was significantly reduced ridership levels resulting in a reduced vehicle fleet count,” the memo notes. “RTG was able to improve its performance during this period.”

As for the February to April period, “during which time a series of technical issues severely impacted fleet availability,” the city will assess RTG’s $12.93 million invoice once payment for the fall period has been completed.

“At the same time as the city releases partial payments, the city is reviewing all avenues available to it under the project agreement to ensure that it receives the reliable service it contracted to obtain,” the memo says. With RTG remaining in default, and failing to live up to its contractual obligations, “the city continues to take steps to enforce its contractual remedies and hold RTG accountable for the costs incurred as a result of its defaults.”

RTG is still proving unable to provide a promised 15 trains for regular use in peak service periods, according to the memo, even with a $16-million holdback up for grabs.

While RTG had told the city it would have 15 trains available for use during the morning peak periods by Aug. 4, and has at times been able to accomplish this, “it cannot do so consistently due to the wheel cracking issue, which requires ongoing safety inspections,” the memo notes.

Now, RTG is saying it’ll have 15 trains ready for peak use by Sept. 8, at which point it would receive $16 million from the city for passing that milestone.